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Would contributions to a sipp or payments for a company organised green car lease scheme be deducted before you paid the c62% tax if the costs/payments were exactly £15,000 (assuming you were paid £115,000).

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We may find that these avoidance schemes get revoked in the budget on the 21st of next month. If the rules don't change I'm planning "salary sacrifice" from April - the key thing to watch out for here is not to affect your entitlement to S2P.

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If your including the employee NI, then I should include that with my effective tax rates, pushing the 117% band up to 130.8%.

In your scenario the person could also be paying the 9% graduate tax too.

I know that effective rates on very low incomes are the biggest outrage of all. But surely that only applies to incomes below the NI threshold? Once you're paying NI you're on an adequate income for the basics.

OK, I guess you're in the overlap band, with income that's adequate but still below the level of benefits for the 100%-lazy?

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I know that effective rates on very low incomes are the biggest outrage of all. But surely that only applies to incomes below the NI threshold? Once you're paying NI you're on an adequate income for the basics.

OK, I guess you're in the overlap band, with income that's adequate but still below the level of benefits for the 100%-lazy?

JSA + hb + ctb exceeds NI and 20% tax threshold.

So after JSA reduced @ rate of 100%, you face 85% (hb rate of 65% + ctb rate of 20%).

And I wouldn't call £150 a week adequate when your rent is practically half that amount.

I need roughly 32 hours work/week to break free of benefits. After that the EMTR reduces to NI (12%) + tax (20%) + employer NI (13.8%) - 45.8%, until I hit SLC threshold and then you can add another 9% on.

This doesn't include work clothing or bus fares. (I also neglected the £5 income disregard - you can earn a fiver a week without being taxed upon it, consider it a 48 minute band of 0% tax at the start)

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Yes, I realise that. Thanks for filling out the details that arrive at your effective rate!

And I wouldn't call £150 a week adequate when your rent is practically half that amount.

I'd call that very adequate. Positively rich by any historic standard (and doubly so if that rent gets you a room of your own)! Yes, it's near the bottom of the pile, but it's a lot better than what I had as a new graduate. Let alone later as proprietor of a business that was failing to generate revenue, when my effective tax rate was around 300%.

Don't give up! You may never be top of the pile, but you can work your way up to something middling!

And I wouldn't call £150 a week adequate when your rent is practically half that amount.

I need roughly 32 hours work/week to break free of benefits. After that the EMTR reduces to NI (12%) + tax (20%) + employer NI (13.8%) - 45.8%, until I hit SLC threshold and then you can add another 9% on.

This doesn't include work clothing or bus fares. (I also neglected the £5 income disregard - you can earn a fiver a week without being taxed upon it, consider it a 48 minute band of 0% tax at the start)

I'm well aware you are not old enough to qualify but on an income of £186.25 (net) per week would qualify for £90.72 Working Tax Credit (working 35 hours per week).

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I'm well aware you are not old enough to qualify but on an income of £186.25 (net) per week would qualify for £90.72 Working Tax Credit (working 35 hours per week).

Roll on July, I'm going to see my JC+ advisor about NEA today, so hopefully should be back working soon, and hopefully break free of benefits, or at least be better off than dole for the last 6 months of being 24. I might be working in your neck of the woods soon too, some work going in a quarry picking sandstone

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Roll on July, I'm going to see my JC+ advisor about NEA today, so hopefully should be back working soon, and hopefully break free of benefits, or at least be better off than dole for the last 6 months of being 24. I might be working in your neck of the woods soon too, some work going in a quarry picking sandstone

hehe I was in your neck of the woods yesterday. I crept over the border into the socialist republic of South Yorkshire, to Dunford Bridge, via Hade Edge silently by bike, to avoid suspicion. My mate lives at Stocksbridge. Not many border guards in them parts.

And I wouldn't call £150 a week adequate when your rent is practically half that amount.

I need roughly 32 hours work/week to break free of benefits. After that the EMTR reduces to NI (12%) + tax (20%) + employer NI (13.8%) - 45.8%, until I hit SLC threshold and then you can add another 9% on.

This doesn't include work clothing or bus fares. (I also neglected the £5 income disregard - you can earn a fiver a week without being taxed upon it, consider it a 48 minute band of 0% tax at the start)

130% tax rate... Sounds like the government now has the real incentive to use every tricks to get people out to work then...

The middle 60% bracket is foolish and poorly thought through, but looks like it is here to stay. If you are in this bracket you won't get much sympathy from anyone earning less than you. The solution is to put the amount in excess of £100k in a pension.

On top of this you have to pay NI which is 2% for the 60% bracket, hence why people talk about a marginal rate of taxation of 62%.

The middle 60% bracket is foolish and poorly thought through, but looks like it is here to stay. If you are in this bracket you won't get much sympathy from anyone earning less than you. The solution is to put the amount in excess of £100k in a pension.

On top of this you have to pay NI which is 2% for the 60% bracket, hence why people talk about a marginal rate of taxation of 62%.

Bugger - I'm currently at £126k Gross and £114k taxable , but with 2 months to go - I'm going to have to stick some cash into my second pension, but I am not sure how to get the rest back off the Inland Revenue who had it via PAYE.

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Bugger - I'm currently at £126k Gross and £114k taxable , but with 2 months to go - I'm going to have to stick some cash into my second pension, but I am not sure how to get the rest back off the Inland Revenue who had it via PAYE.

Simply fill out a self assessment tax return and reclaim the extra 20% (pension manager will do the first 20% reclaim and put it in the pot).

So on a weekly basis for under 25 single adult in rented accommodation (Assume rent = 65, council tax = 20, U25 JSA rate of £53.45):

£0

----------- 0%

5

-----------100%

58.45'

----------- 85%

102

----------- 97% *(+13.8% if including employers NI = 110.8%)

145

----------- 117% *(130.8%)

158.45'

----------- 32% *(45.8%)

[Full time work = 37.5*6.08 = 228]

816.82

----------- 52% *(65.8%)

To include tax credits for a single male one would be 25+, so the (') bands would be increased slightly 67.50 to take account of normal rate JSA,, tax credits would kick in at 30hours (6.08*30= 182.40) paid at a rate of 1180/year = 22.70/per week, these are then withdrawn @ 41%.

The middle 60% bracket is foolish and poorly thought through, but looks like it is here to stay. If you are in this bracket you won't get much sympathy from anyone earning less than you. The solution is to put the amount in excess of £100k in a pension.

On top of this you have to pay NI which is 2% for the 60% bracket, hence why people talk about a marginal rate of taxation of 62%.

Could one of you smart people explain this for me please. say you earn 115.....the ideal is putting 15k into a pension to regain the personal allowance. Now that would mean "reducing income for tax purposes" - now this is the bit I dont understand - is it as simple as putting a 15k contribution into any old personal pension or does it need to be a special type of pension eg asalary sacrifice arrangement.

Thanks

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Could one of you smart people explain this for me please. say you earn 115.....the ideal is putting 15k into a pension to regain the personal allowance. Now that would mean "reducing income for tax purposes" - now this is the bit I dont understand - is it as simple as putting a 15k contribution into any old personal pension or does it need to be a special type of pension eg asalary sacrifice arrangement.

Thanks

It is easier if you can use a scheme sheltered from PAYEE which will typically be your work pension using salary sacrafice.

My new Tax adviser (i didn't have one before) says it not what you pay into your pension that determines the tax relief, but your highest rate of tax and then work in reverse as you use the allowance - which I kind of knew.

The question I still haven't fathomed is I can pay in a lump sum, but the so and soes at the HMRC still have a huge chunk of my gross income. The relief I'll get will most be at 40%, with half of that claimed back by the provider. I still haven't worked out what to do to get the 60% bit back, basically the challenge is I may be a lot closer to £150k than I'd thought, so I might have to stick a huge sum in to even get use of the 60% releif.

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I have a personal pension with my employer so I get 20% relief at source (is this "salary sacrifice" - i thought salary sacrifice is something specific.

I get the additioanl 20% relief through my coding notice or tax return.

So if I wanted to top my pension up this year by say 10k to "get back" the personal allowance I dont get how that happens as you say - just a one off payment direct to the personal pension out of my taxed income or does it need doing in some special way.

It is easier if you can use a scheme sheltered from PAYEE which will typically be your work pension using salary sacrafice.

My new Tax adviser (i didn't have one before) says it not what you pay into your pension that determines the tax relief, but your highest rate of tax and then work in reverse as you use the allowance - which I kind of knew.

The question I still haven't fathomed is I can pay in a lump sum, but the so and soes at the HMRC still have a huge chunk of my gross income. The relief I'll get will most be at 40%, with half of that claimed back by the provider. I still haven't worked out what to do to get the 60% bit back, basically the challenge is I may be a lot closer to £150k than I'd thought, so I might have to stick a huge sum in to even get use of the 60% releif.